Add William Dean Singleton to the roster of newspaper publishers using bankruptcy court to get out of an over-leveraged financial mess. Affiliated Media, the holding company for MediaNews Group, announced late Friday that it will fill “soon” for prepackaged bankruptcy. Its lenders have approved a Chapter 11 filing to reduce to the $930 million debt to a more manageable $165 million. The arrangement will leave Singleton, chairman and CEO, and Joseph J. Lodovic IV, president, in control of the board and the company. But Singleton’s management team will own only 20 percent of the company through stock and warrants.
The company, which operates in 12 states, stressed that the bankruptcy should not affect the operations of any of its 54 daily newspapers, 100-plus non-dailies, websites, television and radio stations. MediaNews says all of the company’s papers, with one exception, are profitable. In a statement, Singleton said: “In our search for a new model that reflects the realities of today’s changing newspaper environment, we have come up with a solution that restores financial strength and flexibility to our balance sheet. It does not affect the operations of any of our newspapers or vendors or other operations. It gives us one of the strongest balance sheets in the industry. It gives us breathing space to create a new model for the newspapers we publish.”
The agreement cancels all existing equity interests in Affiliated Media — including that of Hearst, which paid $317 million for a stake in MediaNews in a complicated deal several years ago. A Hearst spokesman declined comment.
Singleton addressed the equity wipeout: “This reorganization does not come without pain. Current shareholders will be losing the value of their holdings. But we believe that adopting this plan will give us a far better platform from which to develop, grow and participate in the consolidation and re-invention of the newspaper industry.”
time to re-rack the video of the news conference held back when the rocky went out, singleton could hardly contain himself.
Interesting to me how a prepackaged deal can sound so good. Looking at this in a simple way. they have taken and traded 75 percent of thier debt for 80 percent of thier holdings company. Which really means they have lost their business.the statement “More breathing space to create a New Model.”
That’s said just to get more time from lenders and make cuts that will show a less loss to the bottom line.Anyway it’s really to bad. sign of the times.